Luxury Group LVMH Playing Magic Cube

Bernard Arno, the boss of the world's largest luxury goods group, is unwilling to be controlled by others. LVMH group has not only collected more than 60 of the most profitable luxury brands in the world, but also learned many sales channels that should not be underestimated. DFS global duty-free shops and silk lotus were acquired by LVMH in the 90s of last century. Arno also joined the gambling He Hongshen family and invested in a top shopping mall in Shanghai.

DFS and siren are all around the world, and LVMH is in their own hands and has a considerable channel of discourse. When brands and channels cooperate, they can also play many marketing games. Today, reporters check the magic cube for LVMH.

　　 DFS: duty-free shops stick to tourists.

Turning LVMH's official information, the group's business is divided into liquor, fashion leather, perfume, cosmetics, watches and jewellery, and "boutique retail". The most important member of the "boutique retail" is the DFS global duty free shop.

Tax exemption is an ancient form of business. People traded alcohol on ships for a long time, excluding taxes and fees, and the price of goods was very attractive.

DFS was founded in 1960 by two Americans. Their first two stores opened in Hongkong, China and Honolulu, Hawaii, selling "duty-free" products to visitors. This pattern was quickly successful, when the new rich Japanese tourists surged, bringing DFS a steady stream of passenger and cash income.

DFS's business grew bigger and bigger, and began to expand into duty free shops and shopping malls outside the airport, until it grew to be the world's largest tourist retailer, attracting Arno's attention.

In 1996, LVMH acquired the equity of DFS creator Feeney and two of its shareholders. Since then LVMH and founder Miller jointly owned DFS. After holding absolute control over DFS, Arno felt there was no need to continue to increase DFS.

Commenting on the merger, the industry commented: "the world's top luxury goods manufacturers have controlled the world's leading luxury sellers."

Under the banner of LVMH, DFS is distributed all over the world, and is distributed in Oakland, Bali Island, Guam, Hongkong, Macao and other places, covering an area ranging from 2000 square meters to 16000 square meters.

DFS opens the door to LVMH's own luxury brands, and does not exclude cooperation with its competitors. DFS stores in various stores include many classic brands, such as Cartire, Chanel, Gucci, Louis Weedon, Tiffany and emerging brands such as Kate Spade and Michael Kors.

In addition to the price advantage, DFS's marketing is also trying to stimulate sales. Arno created a model very early. Customers can choose goods at any luxury store in the city, but if they have a boarding pass, they will not pick up the goods. When customers boarded the plane, someone will send their products to the cabin for tax-free purchase.

The most famous DFS store on the Hawaii archipelago is designed as a labyrinth of large storeys in several storeys. Customers walk through all the commodity display areas in accordance with the designed passageway before reaching the exit, which allows customers to purchase as much as possible. In Hawaii, taxis can be reimbursed by taxi between different duty free shops.

In 2000, the Celine brand of LVMH group even designed a handbag series for DFS sales, and some cosmetics brands also had products specially sold for duty free shops.

A senior executive at DFS told reporters that although DFS is targeting tourists who are in a hurry, they have also begun to strengthen their emotional connections with customers in recent years to enhance their experience. They often hold various activities aimed at VIP customers in the store.

DFS held a wine exhibition in Singapore store, invited some brewers to communicate with customers face to face wine tasting, and were invited to be members of 400 DFS platinum cards. Other activities such as new products, cocktail parties, fashion shows, watches and wristwatches, on-site production and display are constantly in DFS.

However, due to the restrictions of policies and regulations, DFS can not enter China, and can only strive for Chinese tourists going to sea.

　 Silver: private brand Gold mine

In 1969, a man named Dominique Mandonnaud opened his first cosmetics store in Rio mori, France.

At that time, beauty products were only sold in the counters of department stores, and there was no open option on the market. And he has an unusual idea. He transformed the cosmetics monopoly store from a simple sales place into an interactive space for sightseeing, roaming and trying.

This mode is very popular with customers. By 1979, Mandonnaud had opened more than a dozen new chain stores and settled in Paris for the first time in 1988. In 1994, the store was named after SEPHORA (Mose). It was named after the name of the wife in the Bible.

In 1997, the success of France's success was LVMH. LVMH thus mastered an important high-end cosmetic channel and developed it to the world. As of 2013, SEPHORA had as many as 1859 stores in 28 countries worldwide. In April 2005, SEPHORA opened its first store in Shanghai in China.

The brand on silk shelf is quite fastidious. LVMH group's many high-end cosmetics first stationed, Guerlain, Dior, Benefit and so on. L'OREAL, the world's largest cosmetics group, is also a partner of the company. Lancome, L'OREAL and Paris all occupy an important position on the shelves.

After entering China, China's local cosmetics company Shanghai Jahwa cooperation, Shanghai Jahwa purchased some stake in China, and Shanghai's Herborist brand is sold in the market. Herborist has also entered the European market such as France by means of silk.

However, it is not invincible. A French cosmetics company's marketing department revealed to reporters that she had tried to cooperate with Chanel cosmetics many years ago, but the other side has been very reserved. So there has been no Chanel cosmetics in silever until now. The latter always appears in the high-end shopping malls in the mode of counters.

LVMH has a much better relationship with Gucci, another big rival. Gucci's perfume is always in the fragrance area of the first time.

Its location is "classic" and "potential" brand, including skin care, make-up, fragrance, hairdressing and so on. After being bought by LVMH, it has become a big role in beauty circles.

Thanks to the support of LVMH group, after easy to have Guerlain, L'OREAL and other industry leaders, she gradually began to use the channel's brand strength to collect those relatively small brands.

The reporter understands that many small European brands can not expand the Chinese market independently. With their size and potential, they can not win the market counters, let alone market promotion of these burning money.

So they signed a cooperation agreement with the bank, occupied a small area on the shelf, immediately owned a good location of the silk, and entered the Silk Street store at the same time. As for anyone who bully anyone in the cooperation agreement, only the two sides themselves know it.

After the market matures, the company enhances its customer loyalty through membership. In recent years, the company has launched the "Silk Lotus" brand cosmetics, which is both a retailer and a brand dealer. The gross profit margin has been greatly improved.

　　 SHANG Jia Center: opponents also Partner

In 2009, Arno and the gambling He Hongshen family jointly invested in the construction of the "SHANG Jia building" in the Hongqiao Development Zone of Shanghai, with a total investment of 500 million US dollars.

The SHANG Jia center is located at the junction of Zunyi Road, Xian Xia Road. Its shape is like the skirt of a dancer. It is called "boots building" in the bookshop. This is one of the few real estate investments LVMH has made in China. It is also said that this project is invested by Arno in his own name.

In 2013, SHANG Jia Center opened and LVMH's main brands such as LV and Dior entered together. Meanwhile, many clocks and jewellery brands of the earthen group, the Earl of MontBlanc and many of its watches and jewellery brands, also set up shop together. At the same time, it attracted many independent brands such as Burberry, Tod 's and so on. For a while, the SHANG Jia center jumped to the most luxurious shopping center in the Shanghai lineup, but the passenger flow has not been satisfactory so far.

A Italy luxury agent told reporters that the cooperation between Chinese brands and shopping malls often went through a game. The best position between brands is to compete with the market. Some brands pay monthly rent to the shopping mall on a fixed amount, and the other mode is "shopping mall" according to brand sales performance. The rules of cooperation between the two sides are nothing more than "big shop bully" or "big customer bully". After LVMH owns the mall, the relationship between brand and shopping malls becomes "internal contradictions".

The world's second largest luxury group, LVMH, is an old rival. In the SHANG Jia center, the two sides have reached a tacit understanding. The peak group is strong in watches and jewellery, while fashion is weak, while LVMH complements it. The clocks and watches of many of the peaks appeared in the SHANG Jia center, which not only gathered the popularity of shopping malls, but also avoided the excessive competition with the LVMH brand.

Examples of luxury carrier penetration channels are everywhere. Net-a-porter and Swatch share shares with Hendry. When you develop enough, you will always be able to resist the whole industry chain.

　 Let's talk about it. Story 。

One day, LV's long term supplier of the handbag, zipper brand YKK suddenly raised the price to LVMH. Over the years, YKK has excellent quality and high performance price ratio. And how did Arno respond? He did not hesitate to buy another zipper brand - YKK soon wore soft.

There is no greed and no competition for control. There is no Arno today.